* Chinese yuan hits four-year low
* Too early to judge Chinese currency policy-NY Fed’s Dudley
* Alibaba falls to all-time low after revenue growth slows
* Apple hits more than six-month low
* Indexes down: Dow 1.1 pct, S&P 1 pct, Nasdaq 1.2 pct (Updates to open)
By Tanya Agrawal
Aug 12 (Reuters) - Wall Street was down more than 1 percent for a second day in a row, with the Dow falling to a six-month low, on Wednesday as the continued dip in the yuan, exacerbating fears about a global economic slowdown.
The yuan hit a four-year low against the dollar, its weakest since August 2011, after the Chinese central bank set its daily midpoint reference at a level even weaker than Tuesday’s devaluation.
A cheaper yuan reduces the competitiveness of companies outside of China as it makes their goods and services more expensive, while reducing the value of revenue they generate in the country.
Shares of U.S. automakers with a big exposure to China fell. General Motors Ford Motor and Fiat Chrysler were all down between 1 and 4.6 percent.
Apple, for whom China is key growth market, fell 2.2 percent to more than a six-month low at $110.92. The stock was the biggest drag on the three major indexes.
“We had a decent run-up but this is all unwinding pretty quickly. A competitive devaluation of currencies is never good”, said Rupert Baker, a Mirabaud Securities European equity sales executive.
At 9:52 a.m. ET (1352 GMT), the Dow Jones industrial average was down 200.78 points, or 1.15 percent, at 17,202.06. 29 of the 30 Dow components were in the red.
The S&P 500 was down 21.03 points, or 1.01 percent, at 2,063.04 and the Nasdaq composite was down 62.42 points, or 1.24 percent, at 4,974.37. Both indexes hit a one-month low.
Eight of the 10 major S&P 500 sectors were lower. The telecommunications index’s 1.83 percent fall led the decliners, with AT&T’s 3 percent drop weighing the most after the U.S. carrier gave a full-year profit forecast.
The falling yuan also hit commodity prices, with copper hitting a 6-year low. The 19-commodity Thomson Reuters/Core Commodity CRB index were at lows not seen since 2003.
The devaluation of the Chinese yuan has huge implications for rest of world demand and commodity prices but it was too early to judge what is happening with the Chinese currency policy, New York Fed President William Dudley said. He said the Fed was nearing a rate hike, but did not say when it would move.
As the quarterly earnings season drawing to a close, investors once again shift focus from micro to macro factors, with the timing of a Federal Reserve interest rate hike front and center on their minds.
China’s surprising move has led to speculation that the Fed wait until December to raise rates. A decline in U.S. overnight indexed swap rates indicated the probability of a rate hike next month faded to less than 50 percent, from a near 60 percent probability after last week’s solid U.S. jobs data.
“But on balance, the PBOC action marginally lowers the odds of Fed liftoff in September, in our view, and December liftoff remains our call,” Goldman Sachs said in a note.
With more than 90 percent of the S&P 500 companies having reported, second-quarter earnings are expected to rise 1.2 percent, while revenue is expected to fall 3.5 percent.
Alibaba fell as much as 8.2 percent to an all-time low of $71.03 after the retailer’s revenue growth slowed to its lowest rate in more than three years.
Macy’s fell 3.4 percent to $65.09 after it reported weak quarterly sales as a strong dollar “significantly” reduced spending by foreign tourists.
Declining issues outnumbered advancers on the NYSE by 2,036 to 748. On the Nasdaq, 1,842 issues fell and 543 advanced.
The S&P 500 index showed three new 52-week highs and 17 new lows, while the Nasdaq recorded eight new highs and 77 new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D‘Souza)